December 4, 2010

‘Outlier’? Desperate Reuters Reporter Works to Minimize Impact of Awful Jobs Report

The unemployment rate jumped to a seasonally adjusted 9.8% in November and only 39,000 seasonally adjusted jobs were added during the month, according to the Employment Situation Report released yesterday by Uncle Sam’s Bureau of Labor Statistics.

Although she at least recognized the report’s negativity, Lucia Mutikani at Reuters seemed bent on downplaying its impact, even finding an “expert” who characterized the BLS’s work as an “outlier” in her Friday evening write-up. Nobody’s claiming the folks at BLS are perfect, but I cannot recall a time when an establishment press wire service reporter has questioned the Employment Situation Report’s underlying validity. Despite its supposed lack of credibility, Ms. Mutikani still used the information provided as an excuse to insert a point about how it should cause Fed chief Ben Bernanke to continue the “money from nothing” enterprise euphemistically referred to as “quantitative easing.”

Of special note was Ms. Mutikani’s bizarre contention that the seasonal adjustment calculations might be flawed. Unfortunately for her, comparisons of actual results on the ground (i.e., the not seasonally adjusted numbers) to the seasonally adjusted numbers that resulted were consistent with November 2004, the last comparable year. This has not always been the case in the volatile economy of the past 2-1/2 years.

Here are the first eight paragraphs from Ms. Mutikani’s morose musings (bolds and number tags are mine):

U.S. employment barely grew in November and the jobless rate unexpectedly hit a seven-month high, hardening views the Federal Reserve would stick to its $600 billion plan to shore up the anemic recovery. [1]

Nonfarm payrolls rose 39,000, with private hiring gaining only 50,000, just a third of what economists had expected, a Labor Department report showed on Friday. The unemployment rate jumped to 9.8 percent from 9.6 percent in October.

The weak report was a surprise given the relative strength of some other recent economic signals, [2] including robust retail sales. Economists had expected 140,000 new jobs and a steady unemployment rate.

While the data raised a warning flag, many analysts cautioned against reading too much into it.

“The report comes as an unwelcome bucket of cold water,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “We’re reluctant to take it at face value and suspect that it is an outlier — on the downside — but it does underline that the recovery remains a gradual one.” [2]

Stock market investors also appeared to be in disagreement with the weak hiring number, and U.S. shares closed marginally higher. Prices for long-dated U.S. government debt fell while the dollar dropped across the board. [3]

A separate report from the Institute for Supply Management showed service sector activity rose in November [4], with a gauge of hiring reaching its highest level since October 2007 [5], before the economy tumbled into recession.

Payrolls for September and October were revised to show 38,000 more jobs were gained in those months than previously estimated, taking some sting out of the report. [2] Some economists said November’s data was likely distorted by the way it was adjusted for seasonal fluctuations [6] and said they expected a snap back in December.

Points:

  • [1] — The news is barely out, and the Reuters reporter can’t wait to use it as a justification to continue Ben Bernanke’s version of “stimulus.” After far more than $3 trillion in real deficits run up by the Obama administration and heaven knows how much “quantitative easing” by the Fed, it should be obvious that it it hasn’t worked and, further, that it has arguably caused the employment market to run out of the bit of steam it had in September and October.
  • [2] — “Outlier”? Since when? As noted earlier, I don’t think I’ve ever seen such a reference. Also, the fact that September and October were revised upward only makes November’s result look like a bigger fall from what had been a semi-hopeful situation.
  • [3] — You know a reporter is scraping for excuses when she cites what the stock how the stock market closed 7-1/2 hours after the report’s release. As shown currently at NASDAQ.com’s home page, the DJIA and the NASDAQ both opened significantly lower at 9:30, only an hour after the report came out. Other influences took over from there.
  • [4] — ISM’s reports are very, very important indicators, but we should remember that they are surveys of sentiment, not of hard numbers.
  • [5] — Ah, the obligatory negative Bush era reference.
  • [6] — Finally, Lucia’s lament that about “some economists” questioning the seasonal adjustments doesn’t fly. Referring to what has actually happened (i.e., the not seasonally adjusted numbers) clearly demonstrates this:

BLSnsaJobsAddsThru1110

BLSsaJobChanges1110.png

Translation:

  • For all nonfarm jobs, the last time November’s actual number was close to this month’s 217,000 was in 2004, when it was 251,000. You’ll notice that after seasonal adjustment, 2004′s number was added was 64,000. That’s pretty consistent.
  • For all private-sector jobs, the comparison is even more obvious, because in both 2010 and 2004 the number of jobs actually added was 101,000. This year’s +50,000 after seasonal adjustment is a bit better than the 28,000 in 2004, so if anything, Ms. Mutikani’s weak attempt at a complaint goes in the wrong direction, and November 2010 got a bit of a break relative to November 2004.

Ms. Mutikani’s attempted dress-up of yesterday’s pig of an employment report is an epic fail, but quite illustrative of the lengths to which establishment media reporters will go to tell us we’re not really seeing what we really are seeing.

Cross-posted at NewsBusters.org.

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11 Comments

  1. One other idiotic excuse I heard was that the numbers are low not because of all the crap Obama and the government is doing but because people are refusing to hire because they have learned how to “make do with less.”

    Okay, if that’s the case, why did the unemployment rate drop after the early 2000s recession? Surely companies didn’t have to hire, since they would have learned how to “make do with less.”

    Comment by zf — December 4, 2010 @ 7:46 pm

  2. Sorry, way O.T, but did you get my e-mail? You would think Cheney being sought by Interpol would be big news, but I’ve found nothing on the blogs. Have you seen anything?

    As for the FISA story, does the ACLU really think that if NSA agents are truly bending the rules as they allege that making FISA less effective is going to stop someone who is hell bent on going rogue? No, all it will do is cripple the hands of the good agents who want to play by the rules whatever they are while the bad ones (again, allegedly) will continue to do what they do and the U.S. will become even more vulnerable to attack again.

    P.S. I did some digging before posting and it seems the ACLU’s “evidence” seems to consist of a yearly report by some oversight committee in the Justice Dept. or somewhere claiming there were violations. This proves nothing, as a) the report has very vague language b) we don’t know what standard whoever wrote the report is using to claim violations, (it could be a flawed and/or overeager standard and c) there is nothing that says the violations (if they are any) were even serious. They could have been mere minor procedural lapses or unintentional accidents. Also, the report could be a political tool instead of an objective accounting of facts.

    BTW, the Obama Justice Department has little credibility in accusing others of violating rights.

    Comment by zf — December 4, 2010 @ 8:48 pm

  3. ZF, I read ZH and wasn’t even sure it was real or some guy on a rant. I did find the Bloomberg item, and it exists. I think no one takes it seriously because of the long time since the alleged events occurred, the utter corruptness of Nigeria as a country, and the lack of an enforcement mechanism at the place where Nigeria filed the charges.

    As to ACLU FISA
    HERE

    I’ve seen this. I think what’s interesting is that what is being described has at a minimum continued under Obama, and at a max may not have begun or begun in earnest until Obama became prez.

    Comment by TBlumer — December 5, 2010 @ 8:11 am

  4. #4, LOL, that’s what I thought when I read the story at ZH. I was thinking, “does this person have a point and what the heck is it?” It’s awfully disjointed. I even went on some lefty sites afterwords and found nothing. It’s interesting that even the leftists seem to not find anything to the charges. I guess I’m a worrier. Whenever I hear something negative, I tend to fret over whether it might be true or not.

    As to FISA, I don’t think anyone was under the delusion that it would never be abused by individuals when it was created in 1977 (I believe that was the year) or during the subsequent revisions. Human nature being what it is, some people are going to do wrong no matter what. And rules and restrictions aren’t going to stop them. But just because everyone knew abuses could and would happen didn’t mean that overall it was not a good and needed thing to protect our lives. Cops sometimes abuse their power, but nobody suggests the dismantling of the police force.

    Comment by zf — December 5, 2010 @ 9:43 am

  5. Oh, and forgot to mention: whaddya think of the excuse for the bad November at comment #1 above? Cute, isn’t it?

    Comment by zf — December 5, 2010 @ 9:44 am

  6. #1 and #5, making do with less is something that companies figure out how to do in a recession, but the problem is that there is no recovery in demand that would enable employers to conclude that making do with less will leave them unable to serve their customers — which is what has to happen before rehiring occurs. That and the multitude of reasons relating to government- and Fed-uncertainty explain why companies won’t pull the trigger on new hiring until they feel they absolutely must.

    Demand did materialize after the 2001 sort-of recession. It hasn’t materialized now.

    Comment by TBlumer — December 5, 2010 @ 9:55 am

  7. #6, I phrased what was said incorrectly, methinks, here’s the original comment in all it’s flavor:

    “The problem with bringing down the stubbornly high unemployment rate is that employers are learning to do more with less.”

    Now the way the CNN guy says it up there, it sounds like he trying to deflect blame from the current climate created by POR and unto employers. Apparently, they didn’t know how to make do with less before, suddenly found out they could (as if they had never experienced recessions or bad times before) and are only not hiring not because they don’t need to, but because they should and won’t anyway. What Scrooges, huh? Obama is trying so hard to bring unemployment down, but those darn evil business just won’t hire! Now my experience is that employers have contingency plans and such for downturns anyway (and usually experience with slack business) and don’t need a recession to “teach” them how to make do with less. So that part is dumb right off the bat. And surely even when there is no demand, there are other considerations that might lead employers to start rehiring again.

    His or her argument is also has a weird insinuation: that business never have to hire more than a skeleton crew and only hire more than that based on some kind of whim or something. Therefore, by he or shes illogic, after every recession or downturn the unemployment rate should never go back down again because employers don’t need to hire again because they can now make do without, demand or no. Which makes no sense and obviously after 2001, the employment rate went back up.

    Just to clarify, when you use the term demand you don’t mean it in a Keynesian sense of the word, right? Because your statement seems as if your saying lowering unemployment depends on increasing demand which might be construed as am argument for Keynesian type policies.

    Comment by zf — December 5, 2010 @ 12:04 pm

  8. #7, if that’s the logic about employers, whoever is saying it is not in real world. Employers will hire when they see evidence of a sustained increase in demand.

    And by “demand” I mean legitimate and not artificially driven interest in buying goods and services.

    Comment by TBlumer — December 5, 2010 @ 3:42 pm

  9. [...] Reuters reporter Lucia Mutikani relayed the same assertion on Friday (covered at NewsBusters; at BizzyBlog), calling the BLS report an [...]

    Pingback by BizzyBlog — December 5, 2010 @ 9:07 pm

  10. #8, Understood and exactly. If you are understaffed and can’t serve your customers, you’d better do some hiring or your in trouble.

    Also, I knew in what way you meant the word, but thought others might misconstrue, Keynesian to jump on that word “demand.”

    So, please don’t kill me.

    Comment by zf — December 6, 2010 @ 12:24 am

  11. #10, Thanks for the clarification nudge.

    Comment by TBlumer — December 6, 2010 @ 6:38 am

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